Dow Chemical Co.'s automotive unit has added injection molding to its portfolio, but the resin supplier said it has no intention of pursuing processing full time.
Its status as a Tier 1 supplier to Ford Motor Co.'s new assembly plant in Bahia, Brazil, came about solely because Ford wanted it there, executives said, but the unique setting has given the chemical giant new perspectives into the business climate faced by its traditional clients.
``You live the life our customers know every day,'' said Bob Rogowski, director of integrated sites for Auburn Hills, Mich.-based Dow Automotive, part of Dow Chemical of Midland, Mich. ``Some of the things you thought you knew, you don't. You just didn't understand the complexities involved.''
Dow Automotive launched production of its injection molding unit in Bahia in April, with a full line ramp-up in October, Rogowski said during a Dec. 10 telephone interview.
The company runs 12 Engel presses, ranging in size from about 300-2,500 tons, producing 20 different parts for Ford's new Fiesta. It also operates a paint line for front and rear bumper fascia and other exterior components, two welding machines and various other assembly systems, Rogowski said.
The company would not disclose how much it invested in the plant.
It supplies the bulk of its components directly to Ford at the automaker's extended Bahia supplier park, but also produces instrument panels for Visteon Corp.
Dow was working with Ford as a resin supplier during the early planning stages for Bahia, Rogowski said. In 2000, Dearborn, Mich.-based Ford severed ties with one of the molders first picked for the site, and turned to the chemical company, asking it to take on the processing role.
``Ford is one of our global strategic customers, and the fact it was them asking us to get involved played a big role in our willingness to pursue it,'' Rogowski said.
But Dow wanted to proceed very carefully. After all, it now is working alongside molders it normally would supply. Visteon injection molds instrument panels at other sites, although in Bahia it is responsible for final assembly and integration for the Festiva.
``There was, when this first came up, a lot of questions about what are you doing, where are you taking this,'' he said. ``They wanted to know if we were going into competition with them.''
Dow Automotive is not alone. Automakers globally have asked suppliers to step into unexpected business areas, from opening new plants in supplier parks to taking over business first awarded to another company to buying out troubled suppliers, said Kim Korth, president of IRN Inc., a Grand Rapids, Mich.-based automotive consulting group.
``You get put into conflicted positions,'' Korth said. ``There is a greater level of sophistication that is required regarding customer relationships.''
For its part, Dow carefully laid out its intentions at Bahia with its customers, indicating it was following the ``pellet-to-part'' concept in a unique setting, and only at Ford's bidding, Rogowski said.
``We're not planning on proliferating this business model, but it's a primary example of our ability to look at nontraditional business opportunities,'' Rogowski said.
It also has a traditional resin supply business with another molder in Bahia. Autometal SA, based in Sao Paulo, Brazil, makes components for a variety of other companies in the supplier park, including door panel substrates for French auto supplier Faurecia.
